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Death of the Golden State

Daily Archives: June 8, 2009

Mexico’s Take Over Of California: Complete By 2014?

In March, April and May, I wrote a series of columns about the sorry condition of California’s GOP (here, here and here). I also handicapped the party’s dismal prospects for winning any of the three most critical elections—either of the two U.S. Senate seats currently held by Democrats Barbara Boxer and Dianne Feinstein or the 2010 governor’s race to replace termed-out Republican incumbent Arnold Schwarzenegger.

Although Boxer will also run in 2010 for re-election, California is in such dire straits that all eyes will be on the governor’s contest. That shapes up as a probable match between Republican political novice Meg Whitman versus either of two Democratic veterans, Feinstein or the omnipresent former governor and current Attorney General Jerry Brown.

But since early spring when I gave my first assessment, California’s political sands have shifted. And with the change, a Republican has suddenly vaulted into the forefront of the state’s politics.

For immigration reform patriots, that’s much more bad news than it is good news. While Maldonado is indeed a Republican—technically—he points to his migrant farm worker parents as the reason for his fierce illegal immigration advocacy.

In a stroke of good fortune for Maldonado, Lt. Governor John Garamendi recently announced that he was abandoning his moribund gubernatorial effort to run instead for the congressional seat about to be vacated when Ellen Tauscher leaves for Washington DC to serve as Undersecretary of State for Arms Control and International Security. [Ellen Tauscher Is Off to the State Department for Sure, by Anne Schroeder Mullens, POLITICO.com, March 19, 2009]

During Schwarzenegger’s bitter dispute with the state legislature to close California’s $40 billion budget deficit (via higher taxes and more debt), Maldonado infuriated his conservative Republican colleagues when he sided with the governor.

But at the same time, Maldonado ingratiated himself, not only with Schwarzenegger, but also with California’s Democrats and independents eager to end the impasse.

Step one in Maldonado’s ascent, then, will take place in a few weeks when Schwarzenegger appoints him to replace Garamendi.

Suddenly, Maldonado will emerge from relative political obscurity to become a key player who, because of his Mexican immigrant background, will be hyped to the max by California’s adoring MainStream Media.

Step two will occur in November 2010 when either Feinstein or Brown easily defeat the Republican candidate—presumably Whitman.

By 2014—the next year the gubernatorial election rolls around—several things will have evolved, all of which play in Maldonado’s favor.

California’s overall economic health will remain on life support—horrible news for an incumbent hoping for another term.

Feinstein will be 81, Brown 76 but Maldonado only 47. In age-obsessed California that creates a huge edge for Maldonado. According to census data, in 2014 the average age of California’s Hispanics will be about 30. Ask yourself this simple question: will those young Hispanics vote for the fossilized white incumbent or the polished Maldonado who can appeal to their ethnic roots?

California’s demographics will have shifted even more dramatically toward Hispanic domination. The state’s population will be about 40 percent Hispanic—the largest voting bloc.

Add to Feinstein and Brown’s age and demographic negatives is that they have knocked around California politics for nearly four decades. If voters of all stripes aren’t sick of them by 2014, then I don’t know what.

Maldonado has been building toward his political ascendancy since 2000.

And in 2008, again addressing the Republican convention, Maldonado closed with these words (translated from Spanish):

“John McCain and my father would be good amigos. Ladies and gentlemen, que viva the immigrant story.”

Maldonado’s bracero father, it is worth noting, has lived in California as a permanent resident for more than forty years withoutbecoming a citizen.

In his own words, Maldonado calls himself “the future of this party” and claims that the GOP needs more Latinos to be its public face.

“If we don’t change, we’re going to go back to the old ways, and we’re going to continue to lose,” said Maldonado, who faulted the party’s hard line against illegal immigration. “They don’t get it on illegal immigration,” he said.

Republican old-timers who may disagree with Maldonado “can beat me up all they want,” he told reporters at a luncheon while he was surrounded by erstwhile allies who, since his support of Schwarzenegger’s budget compromise, now view him as an enemy. [GOP Withering Away in California Heat? by Alex Isenstadt, Politico.Com, April 14, 2009]

Another Maldonado bonus: his campaign will attract a broader base of non-Hispanic California voters, who cannot support other would-be Hispanic candidates like the sleazy Los Angeles Mayor Antonio Villaraigosa, but can stomach the vastly smoother, more intelligent Maldonado.

Last but certainly not least, Maldonado will play his immigrant success story to the hilt. His family’s strawberry farm is a 6,000-acre multi-million dollar business that ships produce worldwide.

By the time Maldonado reaches the governor’s mansion, Mexico’s takeover of California—what remains of it—will be complete.

Of course, none of this is inevitable. As Peter Brimelow recently pointed out, the GOP has so completely failed to mobilize its base in California that in 2008 John McCain actually failed to carry the white vote there. But there is no sign that “Republican strategists” are going to get the message.

California’s tragedy has been a long time coming. Immigration reform patriots have predicted the state’s demise for years.

Still, for this California native, watching it actually happen is unbearably sad.

Joe Guzzardi [email him] is a California native who recently fled the state because of over-immigration, over-population and a rapidly deteriorating quality of life. He has moved to Pittsburgh, PA where the air is clean and the growth rate stable. A long-time instructor in English at the Lodi Adult School, Guzzardi has been writing a weekly column since 1988. It currently appears in the Lodi News-Sentinel.

Did you happen to catch Governor Terminator talking about Judgement Day in California? Mr. Schwarzenegger went on the tube this past week to tell us that “We can only spend what we have. That is the harsh but simple reality,” he said in the rare midyear appearance before a joint Legislature session. “Our wallet is empty, our bank is closed and our credit is dried up.”[Schwarzenegger sees opportunity in budget crisis, By Juliet Williams, Associated Press, June 2, 2009,]

Earlier talk of a Federal bailout was judged a poor idea by many, including the Washington Post in a May 24 editorial, just as General Motors went into bankruptcy with billions of our tax dollars as an inducement.

As if losing an average of almost 600,000 jobs a month in the US should mean we make it easier for the illegal aliens to stay here and to get to jobs American citizens don’t have.

But then, of course, our helpful Federal government is bowing to strong business pressure and allowing over 100,000 legal aliens a month to come here to the US on various brands of work visas.

How many to California? Well here’s a bit of basic demography.

Since the 1965 changes in our immigration laws, we have added huge numbers of immigrants and their children to our national population. In 1970 California’s population was about 20 million. Today, that population is estimated at about 37 million. Of those, the Center for Immigration Studies estimates about 10 million are legal (7 million) and illegal (3 million) immigrants. 35% of all Californians are persons of Hispanic origin, principally Mexicans. Over 8 million Californians were born outside the USA.

Just on the sheer numbers alone, it is not hard to see why California is now bankrupt.

I am a long-time San Francisco Democrat, now transplanted to Washington D.C. So recently I wrote Congresswoman Nancy Pelosi to ask why we didn’t fix our broken immigration system. This was her June 5, 2009 email reply?

“I have long called for comprehensive immigration reform to address the growing disconnect between our nation’s immigration policy and the reality on the ground in cities and communities across our country. Our immigration system needs to honor the promise of America and recognize the enormous contributions immigrants make to our nation. We must enact immigration reform that is humane and honors our American tradition of being a nation of immigrants and a land of opportunity for all. At the same time, we must secure our borders, enforce our laws, and ensure the safety of the American people.

While immigration reform remains an unsolved challenge for our nation, we must recognize that America was built by immigrants, and the immigrant community continues to make significant contributions to our nation. The debate on immigration reform must be framed by our nation’s rich tradition of respect for our shared immigrant heritage. Please be assured that I will keep your comments in mind as I work with President Obama, leadership and the committees of jurisdiction to develop a strategy to advance immigration legislation that promotes our core American values.”

Can you imagine such chutzpah? You know her “comprehensive immigration reform” simply means “amnesty” for the 20 million illegal aliens here now and encouraging many more later. We know the fiasco that the 1986 immigration reform legislation proved to be.

And believe me House Speaker Pelosi is not alone. Senator Charles Schumer (D-NY) recently held very unbalanced hearings on “comprehensive immigration reform” which failed to give time to those opposed to the massive giveaway of American citizenships.

California is certainly getting toxic budgetary news. It is killing the economy and all that this once-vaunted state had to offer in the way of education and environment, making it the envy of the world. The decline I have personally observed is obvious to so many I talk to, yet this fiscal death notice to California which has counterparts in other states, does not seem to worry other Americans—yet.

“Of adult immigrants, 31 percent have not completed high school, compared to 8 percent of natives. Since 2000, immigration increased the number of workers without a high school diploma by 14 percent, and all other workers by 3 percent.

“The proportion of immigrant-headed households using at least one major welfare program is 33 percent, compared to 19 percent for native households.

“The poverty rate for immigrants and their U.S.-born children (under 18) is 17 percent, nearly 50 percent higher than the rate for natives and their children.

“34 percent of immigrants lack health insurance, compared to 13 percent of natives. Immigrants and their U.S.-born children account for 71 percent of the increase in the uninsured since 1989.”

All this means more public costs, more demands on government resources.

How long will this madness continue? California Governor Pete Wilson tried long ago to get help from our Federal Government, but those elected officials knew better than to try to buck the industrial-military complex that now rules our former Republic. Those worthies (notice in what high regard our Congress is rated in the polls) handle immigration like a political popularity contest where the more cheap labor you support importing, the more money flows to re-elect you from the coffers of business.

Result: Just take a look at the bloated California budget. And then we learn that the City of Oakland, California will be soon joining San Francisco in giving all residents including illegal aliens ID cards. That can only serve to add to that city’s nearly $100 million deficit, as public services will now flow to illegal aliens and their anchor babies.

Of course the California voters don’t want to pay to fix this mess. In the May special election, voters rejected all five budget-related measures placed on the ballot by Schwarzenegger and legislative leaders. Revenue has continued to plummet as residents have reduced spending and unemployment has soared to 11 percent.

I predict that as matters get worse—and they surely will–Californians and all Americans will finally wake up to the fact that unchecked immigration, wanton use of the public trough and loss of expected public services will cause a revolt by voters.

But for now too many are sitting on their hands, fat, dumb and perhaps apprehensive but unwilling to take part in the political rough and tumble. Sad that corrective action will likely not happen before devastation to our culture, our traditions, our comity and the prosperity we have enjoyed.

California has had many recent internal signs of overuse and unsustainability. For example, the fish resources of the state have precipitously declined and the commercial salmon fishing season is now closed, while when reasonable new regulations to save the salmon have been proposed, Terminator Schwarzenegger has sided with the farmers who keep degrading the free water they abuse, so that renewal of this great resource is imperilled.

California is the Big Canary. It’s dying—and Americans had better take notice.

Donald A. Collins[email him] is a freelance writer living in Washington DC, and is Co-Chair of the Federation for American Immigration Reform’s (FAIR) National Advisory Board. His view are his own.

“In the mosaic of America, three groups that have been unusually successful are Asian-Americans, Jews and West Indian blacks—and in that there may be some lessons for the rest of us. … These three groups may help debunk the myth of success as a simple product of intrinsic intellect, for they represent three different races and histories. “

Who actually advocates a “myth of success as a simple product of intrinsic intellect”?

I don’t even say that!

Everybody knows that a strong work ethic matters.

The controversial questions are about whether you should be allowed to even mention the existing cognitive differences between groups when discussing, say, the Ricci case.

And, if you are allowed to bring up the racial gaps in intelligence, must we then all assume for purposes of public policy that they can somehow be made to vanish quickly?

Of course, Kristof’s emphasis upon the importance of hard work would logically suggest that Non-Asian Minorities (NAMs) ought to work harder. But Kristof, who presumably likes his job at the NYT and wishes to keep it, won’t say that. So he ends up repeating by rote irrelevant talking points about spending more on education:

“What’s the policy lesson from these three success stories?

It’s that the most decisive weapons in the war on poverty aren’t transfer payments but education, education, education. For at-risk households, that starts with social workers making visits to encourage such basic practices as talking to children. “

Exactly how do these conclusions follow from Kristof’s premises?

Did the Czar send social workers around to encourage Jewish mothers to talk to their children?

In reality, although the highest average income groups in America—Jews, Asian Indians, and Scots (not Scots-Irish)—tend to have the most education, there are also numerous American ethnic groups that tend to make more money than their educational levels might suggest. (For example, Cubans, Israelis, Lebanese Christians, Armenians, Italians, and Greeks.)

Moreover, it’s obtuse of Kristof to cite Asians, American Jews, and West Indians as examples of the importance of hard work relative to IQ since all three stand out in terms of IQ. American Jews average about 10 points higher and Northeast Asians about 5 points higher than gentile whites. The Bell Curve’s analysis of the huge National Longitudinal Study of Youth database reported that children of black immigrants score five points higher on the military’s IQ entrance test than children of American-born blacks.

It would be more persuasive if Kristof were instead to focus on groups with unexceptional average IQs who still do well enough in America. For example, Filipino-Americans only rarely reach the very highest levels of prominence—VDARE.com’s Michelle Malkin might be the most famous Filipino-American on Wikipedia’s list of famous Filipino-Americans—but, they’ve carved out a niche for themselves by being law-abiding, well-mannered, and specializing in burgeoning medical careers, such as nursing and drawing blood.

Studying Filipino-Americans would be particularly useful because they show the paradoxical benefit of not being constantly targeted by diversity outreach. Nobody much cares that Filipinos are more likely to become nurses than, say, lawyers, but African-Americans are constantly lured in over their heads by affirmative action.

Kristof says:

“West Indian blacks, those like Colin Powell whose roots are in the Caribbean, are one-third more likely to graduate from college than African-Americans as a whole, and their median household income is almost one-third higher. “

There’s no question that West Indian-Americans stand out disproportionately among successful blacks in the U.S. For example, Obama’s Attorney General Eric Holder is a “Bajan“—a person whose ancestry traces back to Barbados, the most affluent and educated West Indian island. Although 12,200 web pages describe Holder as the “first African-American Attorney General,”Nation News of Barbados reported last summer that Holder “was born in New York and was raised in what was essentially a West Indian enclave in Queens…”

For some reason, Holder forgot to mention that fact in his February speech demanding that Americans stop being “a nation of cowards” and spend each February out of our “race-protected cocoons” having a National Dialogue on Race. Indeed, Holder’s father, a Barbadian immigrant, and his mother, the daughter of Barbadian immigrants, strove to cocoon him away from African-American culture while he was growing up.

Still, it’s not clear that West Indian-Americans having a one-third higher household income on average than African-Americans is all that impressive. Many West Indians are concentrated in New York City and other metropolises with high costs of living, and so few live in cheap small towns in the South. When housing prices finally collapse in New York, it’s likely that West Indians will wind up defaulting at high rates.

Kristof asserts:

“Richard Nisbett cites each of these groups in his superb recent book, Intelligence and How to Get It. Dr. Nisbett, a professor of psychology at the University of Michigan, argues that what we think of as intelligence is quite malleable and owes little or nothing to genetics. “I think the evidence is very good that there is no genetic contribution to the black-white difference on I.Q.,” he said, adding that there also seems to be no genetic difference in intelligence between whites and Asians. As for Jews, some not-very-rigorous studies have found modestly above-average I.Q. for Ashkenazi Jews, though not for Sephardic Jews. Dr. Nisbett is somewhat skeptical, noting that these results emerge from samples that may not be representative.”

Don’t you love how this is phrased to appeal to ignorant New York Times readers’ ample self-regard? Well, sure, lowbrows may think that Jews tend to be smart, and, well, yes, I guess the social science research does support this stereotype … but us smart sophisticates all know that the “samples that may not be representative”—so there!

Kristof continues:

“In any case, he says, the evidence is overwhelming that what is distinctive about these three groups is not innate advantage but rather a tendency to get the most out of the firepower they have. A common thread among these three groups may be an emphasis on diligence or education, perhaps linked in part to an immigrant drive. “

The concept of “immigrant drive” is the kind of thing that passes for Deep Thought without much thinking ever being devoted to it:

First, in cases where “immigrant drive” really does exist, it’s in large part a selection effect: the more intelligent and/or energetic tend to immigrate.

Second, there are giant examples of foreign countries where America is clearly not skimming the cream: most importantly, Mexico, whose well-educated seldom end up in America. There’s little evidence of educational “immigrant drive” among Mexican-Americans. Fourth generation Mexican-Americans have only a six percent college graduation rate.

Fourth, do Jews in America show more “immigrant drive” than do the small number of Jews back home in Russia? I wouldn’t be surprised if Jews in Russia are more likely to become billionaires than Jews in America.

Sixth, so that leaves West Indian-Americans, who have traditionally been more enterprising than either African-Americans or West Indians.

Remember the recurrent segment on the 1990s Fox comedy sketch show In Living Color called “Hey Mon with the Hedleys” about a hard-working West Indian family? The comic point was to express African-American incredulity over West Indian families’ high rates of moonlighting at multiple poorly-paid service jobs. For example, Damon Wayans complains about his daughter wanting to marry an American doctor who has only one job, explaining, “I never loved your mother. I just married her because she had six jobs.”

Kristof continues some more:

“Among West Indians, the crucial factors for success seem twofold: the classic diligence and hard work associated with immigrants, and intact families. The upshot is higher family incomes and fathers more involved in child-rearing.”

In other words, the greater success of West Indian-Americans over African Americans is due less to education than to hard work and monogamy.

That’s plausible, although there’s an explanation for these behavioral differences that Kristof won’t touch: the most successful West Indian-Americans, such as Colin Powell, Eric Holder, and Malcolm Gladwell, tend to come from the islands’ mulatto middle class.

As the final chapter in Gladwell’s bestseller Outliersabout his mother’s Jamaican family implies, the West Indian middle class worked hard for generations to keep their posterity as “light and bright” as possible by discouraging their daughters from socializing with boys from the darker agricultural and working classes.

Look, if Kristof were actually serious about cultural explanations for the low average levels of achievement by Non-Asian Minorities, then he would recommend a policy of making it clear to them that we aren’t accepting excuses anymore—especially not the pervasive discrimination rationalization.

If we actually want to get a message through to low-achieving minorities, the obvious place to start would be for the Supreme Court to overturn Sonia Sotomayor’s vote in the Ricci case—and for the Senate to reject Sotomayor over that case.

Stealing European American Wealth & Incomes

by Donald Miller

The collapse of the Obama spending machine has a long way to go yet, especially with regard to pilfering the earnings and savings of European Americans. There are many ways Obama & Bernanke can confiscate your income and wealth to establish a multiracial nation.

GREAT GOLD CONFISCATION

To understand some of this, it may be necessary for you to review the history of the great gold confiscation of 1933:

The Gold Confiscation Of April 5, 1933From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102

Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled

An Act to provide relief in the existing national emergency in banking, and for other purposes~’,

in which amendatory Act Congress declared that a serious emergency exists,

I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:

Section 1. For the purpose of this regulation, the term ‘hoarding” means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term “person” means any individual, partnership, association or corporation.

Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following …

RAPID INFLATION NOT SUITABLE

There are fundamentally only three ways to repay the Obama-Bernanke indebtedness—I disregard massive inflation because it would take too long to be effective and, if it happened too quickly, we’d begin to understand the Weimar Republic (1919-1933) really well and up close:

The Weimar Republic had some of the most serious economic problems ever experienced by any Western democracy in history. Rampant hyperinflation, massive unemployment and a large drop in living standards were primary factors. In 1923–1929 there was a short period of economic recovery, but the Great Depression of the 1930s led to a worldwide recession. Germany was particularly affected because it depended heavily on American loans. In 1926, about 2 million Germans were unemployed – this rose to around 6 million in 1932. Many blamed the Weimar Republic. This was made apparent when political parties on both right and left wanting to disband the Republic altogether made any democratic majority in Parliament impossible.

(1) CONFISCATE VALUE OF TAX-DEFERRED ACCOUNTS

The federal government could claim a partial ownership interest in the trillions of dollars locked up in tax-deferred accounts. It could make such a claim on either of two notions, an overriding interest in speeding up the velocity of money, or that it has a shared ownership of the money in a tax-deferred account based on the tax-deferral feature itself—something like the user of an easement claiming an interest in the entire property traversed by the easement user.

It wouldn’t be hard to get bank compliance, they would just be required to transfer the electronic cash in your tax-deferred account to the Treasury and have an appropriately valued Treasury note electronically inserted in the place of the electronic cash. Thus your tax-deferred account would be converted from an asset of yours to a debt instrument masquerading as a new asset.

(2) CONFISCATE VALUE OF ALL EXTRACTED MATERIALS

The federal government could claim a larger or total ownership interest in all natural resources and extracted materials like wood, water, minerals, oil, thermal energies, marble, sand, coal, and so on. A plausible case could be easily made that ownership of all extracted materials is the property of the federal government—that would be a flip of the power to tax or license extractions in a big way.

(3) CONFISCATE MORTGAGE VALUE OF ALL OR SOME REAL PROPERTY

The federal government could claim a larger interest in all or some real property (land, houses, factories, malls, and so on) as something it could mortgage to foreign countries’ financial institutions (China, Japan, etc.) or huge domestic financial institutions. This could generate a lot of new cash if the promise was ownership free and clear of certain classes of American real property—a no-risk situation if there ever was one—in the event of default.

In a sense, the Kelo decision by the USSC a couple of years ago paved the way for such a mortgaging project by marrying it to a species of eminent domain.

Kelo v. City of New London, 545 U.S. 469 (2005) was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another to further economic development. The case arose from the condemnation by New London, Connecticut, of privately owned real property so that it could be used as part of a comprehensive redevelopment plan. The Court held in a 5-4 decision that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a permissible “public use” under the Takings Clause of the Fifth Amendment.

The decision was widely criticized. Many of the public viewed the outcome as a gross violation of property rights and as a misinterpretation of the Fifth Amendment, the consequence of which would be to benefit large corporations at the expense of individual homeowners and local communities. Some in the legal profession construe the public’s outrage as being directed not at the interpretation of legal principles involved in the case, but at the broad moral principles of the general outcome.

Depression 2009 The Largest Train Wreck in Economic History

Change is a constant whether perceived or not; but only when we see it do we believe it has occurred. Then, it is too late.

The phrase, speculative bubble, is used to describe the financial tumescence that characterizes the often manic unfounded rise of asset values. The phrase, however, is inadequate for it fails to convey the destructive aftermath that follows; for such purposes, train wreck, is a better description. In 2009, the largest train wreck in economic history is about to occur.

Unfounded manic speculation, e.g. the 2002-2007 real estate bubble, is not new. Similar manic speculation occurred in internet stocks in the 1990s, radio stocks in the 1920s, as it did in railroad stocks in the 19th century and in tulip bulbs in the 17 th century. Manic speculation is as human as the markets.

THE DELUSION OF RATIONAL MARKETS

The first stock exchange in the world was the Amsterdam Stock Exchange, established in 1602. Amsterdam was also the site of the world first speculative bubble, Tulip Mania, which appeared shortly thereafter, 1621-1636

.. traders signed contracts before a notary to purchase tulips at the end of the season (effectively futures contracts). Thus the Dutch, who developed many of the techniques of modern finance, created a market for durable tulip bulbs.

Short selling was banned by an edict of 1610, which was reiterated or strengthened in 1621 and 1630, and again in 1636. Short sellers were not prosecuted under these edicts, but their contracts were deemed unenforceable…

As the flowers grew in popularity, professional growers paid higher and higher prices for bulbs with the virus [a tulip-specific virus that caused more spectacular colored tulips] . By 1634, in part as a result of demand from the French, speculators began to enter the market.

In 1636, the Dutch created a type of formal futures markets where contracts to buy bulbs at the end of the season were bought and sold. Traders met in “colleges” at taverns and buyers were required to pay a 2.5% “wine money” fee, up to a maximum of three florins, per trade.

Neither party paid an initial margin nor a mark-to-market margin, and all contracts were with the individual counterparties rather than with the exchange. No deliveries were ever made to fulfill these contracts because of the market collapse in February 1637…

The contract price of rare bulbs continued to rise throughout 1636. That November, the contract price of common bulbs without the valuable mosaic virus also began to rise in value. The Dutch derogatorily described tulip contract trading as windhandel (literally “wind trade”), because no bulbs were actually changing hands. However in February 1637, tulip bulb contract prices collapsed abruptly and the trade of tulips ground to a halt.

It is clear that today’s “complex and sophisticated” markets are not as unique as some would believe. What is new, however, are the circumstances and consequences of the current collapse. Today, financial markets are a global phenomena; and so, too, will be the consequences.

The invention of the stock market in Amsterdam in 1602 combined with the issuance of the Bank of England’s credit-based paper money in 1694 was to change the course of human history for the next three hundred years. That epoch is now ending.

The world that credit gave rise to is collapsing as is its credit-based foundation, turning like the proverbial carriage into a pumpkin at midnight, as the hoped for financial fairy tale turns instead into a nightmare of defaulting debt in 2009.

The collapse of global markets and global trade is a sign we have reached the end of this epoch. The current financial collapse is the beginning of its end. When it is over, so, too, will be the era it spawned. Human history moves in waves. Another is about to begin.

ON THE TRAIL OF JOHN LAW

Last year during the Christmas holidays, Martha and I toured the Bank of England’s museum on Threadneedle Street in The City of London, the original cistern of the global well of paper-based credit. Last year, the mood in London was still hopeful. It is no longer.

This Christmas holiday, we followed the trail of John Law from Amsterdam to Paris to Venice . John Law, a Scottish banker and economic theoretician was well acquainted with Amsterdam ‘s financial markets before introducing paper money and subsequent financial ruin to the nation of France on his way to escape, exile and eventual burial in Venice .

It is perhaps appropriate than John Law is buried in the Chiesa di San Moisè; a church in Venice now surrounded by fashionable stores such as Gucci, Fendi, Valentino, Prada, and Versace, luxury retailers who profited handsomely from the excesses of the recent global bubble.

But just as the speculative bubble of Tulip Mania presaged today’s markets, the story of John Law has particular relevance to the current collapse. The combination of financial markets and paper money is a volatile mixture and none was ever so destructively volatile as John Law’s introduction of paper money to the financial markets of France .

John Law believed it was not necessary that money possess intrinsic value such as did gold or silver, money could be fiat, paper notes issued by government edict, an idea resembling those later promoted by American economist Milton Friedman.

John Law’s disastrous experiment with paper money combined with his role in the Mississippi Land Company, a stock bubble on the scale of Tulip Mania, eventually transformed France and much of Europe into an economic wasteland leading eventually to the overthrow of the French nobility.

John Law’s destructive influence on France has been exceeded, however, by today’s extraordinary über- mixture of central bank credit-based paper money, excessive risk and leverage and the globalization of markets—a volatile mixture whose fragility, extreme size and combustibility are now about to destroy the 300 year old world built on debt and paper money.

ON THE SELF-CORRECTING NATURE OF IRRATIONAL MARKETS

In November 2006, Professor Antal Fekete addressed the 2007 class of MBA students at the University of Chicago , the then bailiwick of Milton Friedman, the well-known academic apologist for fiat currencies.

Professor Fekete was to deliver a scathing rebuttal of Friedman’s theories. The professor, a long-time proponent of the gold standard and its role in monetary affairs, believed that John Maynard Keynes on the left and Milton Friedman on the right had given intellectual comfort to policies responsible for today’s monetary problems—the elimination of gold from the international monetary system.

But Professor Fekete did not deliver his address criticizing Friedman. The day before he was to speak, Milton Friedman passed away. Instead of criticizing Friedman, Professor Fekete instead warned the students about the fragility of today’s paper markets, markets that had become an extraordinary inverse pyramid of derivatives (then $480 trillion, now $668 trillion) and potential defaults built on irredeemable promises.

The students gave little thought to the Professor’s warnings. They had prepared too long for their chance at the brass ring offered by Wall Street investment banks, the wealthy moneychangers in the temple of fiat currencies.

As about-to-be graduates of the prestigious MBA program at the University of Chicago , the students had much to expect upon graduation. When the Professor delivered his remarks, the August 2007 credit contraction was still nine months in the future; close, but still well outside the world of possibilities the students believed real.

One student asked:“Even if you’re right, won’t the markets self-correct?”

To the true-believers in paper money, paper markets and paper profits, self-correction was the accepted ideological panacea to whatever the markets would do.

That student never expected that the coming self-correction would wipe away his expected future. That instead of a large starting salary with significant bonuses at Lehman’s, Bear Stearns, Merrill Lynch, or Morgan Stanley, he instead would be wondering how he could repay his student loans when the bank he believed would be his future home had collapsed or merged with another institution to avoid insolvency.

At the time, such possibilities appeared improbable if not outright impossible. Today, they have become the precursors of what is yet to be. A world so at odds with yesterday, that few can imagine what will happen next.

Dmitry Orlov is one of the few that can do so.

DMITRY ORLOV’S FIVE STAGES OF COLLAPSE

Dmitry Orlov, author of Reinventing Collapse; The Soviet Example and American Prospects (New Society Publishers, 2008), watched the collapse of the Soviet Union in the 1990s and predicted a similar crisis would later occur in America .

Buckminster Fuller had also predicted the collapse of the Soviet Union and America in 1981— the twilight of the world’s power structures— in his book, The Critical Path (St. Martin’s Press, 1981). Both nations crippled by excessive debt brought on by excessive military spending (what Bucky called killingry ) were fading behemoths whose passing would make way for a better world.

Orlov writes:

Having given a lot of thought to both the differences and the similarities between the two superpowers – the one that has collapsed already, and the one that is collapsing as I write this – I feel ready to attempt a bold conjecture, and define five stages of collapse, to serve as mental milestones as we gauge our own collapse-preparedness and see what can be done to improve it…

Stage 1: Financial collapse. Faith in “business as usual” is lost. The future is no longer assumed to resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings are wiped out, and access to capital is lost.

Stage 1 in Orlov’s scenario is well underway. The vast majority of investment and commercial banks are now insolvent, propped up and still in business only because of recently granted government guarantees designed to prevent workers from realizing their life savings are in imminent danger.

In Orlov’s Stage 1, savings and access to capital are lost. In modern economies, capital, i.e. credit-based paper, has been substituted for real money, gold and silver. Credit-based paper money is no more real money than an image/belief in god is GOD. Savings, in mature credit-based economies as the US and UK are now virtually non-existent.

Capital is but thinly disguised credit and credit is now rapidly disappearing, a condition that will be fatal for those addicted to its continuing presence, e.g. corporations, governments and workers, especially in the US , UK , Europe , etc. New loan activity has fallen 91 % year to year. The consequences will be unprecedented and extraordinary.

In 2009, the economic train wreck now in motion will occur. It will not be a one time event. It will be a successive series of protracted crisis in conjunction with continuing breakdowns in access to credit, goods and services, an escalating and cascading series of pre vio usly unimaginable events.

In today’s monetarily debased markets, credit has become essential for all commercial activity. This dream of bankers is the nightmare of producers and savers. Credit becomes compounding debt which becomes bankers’ profits also resulting in increasing defaults and bankruptcies. Modern economics is not rocket science. It’s an abomination on the economic body of mankind.

Stage 2 in Orlov’s scenario will follow in the wake of Stage 1. Stage 2 is closer today than it was yesterday. The end game predicted by some will now become the reality for all. The predicted events have no basis in recent memory for those who will be affected.

The three hundred year old world founded on credit-based paper money is ending. The world’s central banks which substituted paper for gold are finding themselves unable to solve the problems their fiat money has created. The consequences are far greater than people can imagine—a limitation that will not prevent them from happening.

GOLD, SCISSORS, PAPER

We who have grown up in the world of credit and debt have no memory or real understanding of the role that gold played in monetary affairs prior to the substitution of central bank credit-based paper for sound money. When the connection was cut between gold and money, few understood the consequences, consequences which are now upon us.

Uncle Milton and Uncle John
Gave much thought to what was wrong
But their bright ideas about the public purse
Have now made things so much worse

Discussion of the monetary role of gold and silver has been expunged from discussion in today’s universities. One of the world’s great economic thinkers whose writings consistently predicted today’s collapse, Ludwig von Mises of the Austrian School of Economics was never accorded a paid position in an American university.

Although given the status of a visiting professor by New York University , Mises was not paid a salary and had to depend on outside assistance in order to survive. That far lesser teachers were salaried in America is an indication why today most American economists are unable to adequately explain or solve our economic problems.

PUTZES FROM PRINCETON

The influence of the US military-industrial complex over academic discourse, while exceedingly effective, has come at a considerable cost to the nation. President Dwight D. Eisenhower warned of this possibility in his Farewell Speech to the nation in 1961. Freedom and intellectual inquiry are not unrelated—nor are tyranny and blind obedience.

Professor Fekete’s intended address at the University of Chicago was titled Where Friedman Went Wrong and included the following quote from Professor Walter E. Spahr, Chairman of the Department of Economics at NYU from 1927 to 1956:

What is the meaning of a gold standard and a redeemable currency? It represents integrity. It insures the people’s control over the government’s use of the public purse. It is the best guarantee against the socialization of a nation. It enables a people to keep the government and banks in check. It prevents currency expansion from getting ever farther out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is a necessary prerequisite to economic health. It is the first economic bulwark of free men.

Professor Spahr’s eloquent words are a timely reminder of the importance of the gold standard and do much to explain how we have arrived at our current circumstances. The gold standard is the constraint upon bankers and government that would have prevented the disaster that is now upon us; and, now in 2009, it is too late to undo what they have done.

Professor Spahr understood that the essential role of gold in monetary systems is to prevent bankers and government from overstepping the bounds of sound governance and prudent banking, bounds, which if undone, will bring ruin to the nation and to its people.

When President Nixon severed the ties between the US dollar and gold—as encouraged to do so by Milton Friedman—the very fears of men such as Spahrs and Fekete were set in motion. Now, three decades later, the results are in.

Financial markets are frozen, global trade is slowing rapidly, governments have debased their now fiat currencies and the collective excesses of government and bankers have brought the world to the edge of another Great Depression.

The warnings of those such as Spahr and Fekete were not heeded. Indeed, they were not even heard. The suppression of open dialogue and issues contrary to the purposes of corporate, banking and government interests carried over into colleges and universities as well as the media. It has cost America dearly.

Only When Freedom Is Lost Do The Reasons For Its Absence Become Clear

For those interested in the critical role of the gold standard, Professor Fekete will be giving a series of lectures March 27, 28 and 29 in Hungary . The gold standard as well as the backwardation of gold and silver and the coming depression will be discussed. For information, contact GSUL@t-online.hu . I will also give a talk at the conference.

THE LEGACY OF JOHN LAW
VERSUS
THE FUTURISTIC VISION OF R. BUCKMINSTER FULLER

I was fortunate to have met Marshall Thurber in law school in 1966, a friendship that has lasted far longer than my abbreviated tenure at law school. I am especially fortunate that Marshall later became a close friend and important supporter of Buckminster Fuller and his work.

In November, during a discussion about the current crisis which was predicted by Fuller more than 25 years ago, Marshall recommended I read Fuller’s final book, Grunch Of Giants (Design Science Press, 1983).

Out of print and offered at the time through Amazon at a collector’s price of $199, Marshall offered to send me his original signed draft if the book was not readily available. Fortunately, Marshall then directed me to the website of the Buckminster Fuller Institute where its price was $17.95, see http://bfi.org/?q=node/406 .

I finished reading Fuller’s extraordinary work, Grunch Of Giants , on Christmas Day as Martha and I crossed the Alps . At this time I will refrain from a personal recapitulation as the work stands on its own and readers are easily capable of reaching their own conclusions. Nonetheless, Grunch of Giants confirmed for me the greatness and breadth of Fuller’s vision.

After reading Grunch of Giants I could not help but see the clear distinction between two diametrically opposed visions/versions of our world: At one end of the spectrum is John Law’s “Scarcity Theory of Value” and at the other is Buckminster Fuller’s “False Assumptions of Scarcity”

The two assumptions and theories are diametrically opposed in intent and consequence and do much to explain the difference between today’s world of crisis (confirming John Law’s theories on scarcity) and tomorrow’s possible promise (Buckminster Fuller’s belief in abundance)

EMERGENCE THROUGH EMERGENCY

Because of Marshall Thurber ‘s friendship with Buckminster Fuller, I am aware of Fuller’s belief in “Universal Emergence Through Emergency”. It is increasingly clear that today’s crisis is rapidly approaching that of an emergency—the prerequisite for Universal Emergence.

Let us stand aside and help its birth. A new and better world is on its way. Gold and silver will help in the interim.

Nouriel Roubini 2009 U.S. GDP Forecasting 40% Home Mortgage Failures?

IF Nouriel Roubini’s 2009 GDP forecast for USA is right, THEN could 40% of home mortgages fail? It’s been a long time since I saw two guys so eager to lose their jobs, Hank Paulson and George Bush could hardly be held back, they were positively skipping out of the door; I wonder why?

Last week Dr. Nouriel Roubini’s newsletter (RGE Monitor) predicted a peak to trough in US housing of 38% to 44% with a bottom not before mid 2010.

But my projection of 32% was based on 3% nominal GDP growth in 2009 (I don’t do GDP I just do real estate prices, I look up the GDP projections), but things are looking worse now. Of course Roubini is the most pessimistic, that’s why they call him “Dr. Doom”.

If Roubini is right in that nominal GDP growth will be -5.4% in 2009 (-3.4% real and -2% inflation) then my model says that house-prices will fall 15% in 2009 (peak to end of 2009 = 35%).

What happens in 2010 will depend on the economy, and no one is talking about that. Roubini hints that the recession could be over by 2010; so for the sake of argument let’s say 2% nominal GDP growth in 2010 (what’s real and what’s inflation doesn’t matter for my model).

In that case my model says the bottom will be some time after mid 2010 with a total peak to trough of 40%.That’s all assuming that long-term interest rates stay low.

So “SNAP!” and ” SNAP!”… using Roubini’s numbers for the economy my model delivers mid-range of his projection. Time for mutual admiration perhaps?

Methodology

RGE don’t explain their methodology so it’s hard to say if that’s two independent views or the same model done twice.

Just for the record, the core of my model is a valuation and in any coherent valuation you are obliged to explain the methodology (I do).

That’s unless you are using Zimbabwe Valuation Standards, or the “Bean Counter’s Big Surprise Valuation Standards” mandated under US GAAP and IFRS. But then RGE’s price forecast is an “economic” prediction, and for that, well apparently, anything goes.

I can’t help wondering if the current mess might have something to do with economists (and bean counters) thinking they have the inside edge on doing valuations for assessing capital adequacy of banks with debt secured by real estate? Isn’t that a bit like hiring an (expensive) dentist to clean your drains?

Nah…can’t be that, Allan Greenspan is a genius and a GREAT ECONOMIST, I know that because he said so himself.

And if you can’t understand that “froth” means the “biggest property bubble in history” you should be working minimum wage as a security guard, if you can get a job at all!

Anyway, back to the point, I suspect we are independent since RGE’s logic appears to be based on inventory (housing starts and foreclosures) and uptake. My model ( Value of Housing Markets in USA and UK Past, Present, and Future) is based on International Valuation Standards and 100+ years of data and does not need to know anything about starts, foreclosures, or sales; rather these are predicted by the model.

It’s an important distinction, if price is affected by starts, foreclosures, and sales then the logical strategy to “rescue” house prices (and the bonds that depend on them – i.e. fix the mess), is to cut starts and foreclosures and to encourage sales by getting Fannie and Freddie to lend irresponsibly.

Or in the words of that Great American Poet…”do it to me one more time…BABY”. That appears, at least to the untrained observer, to be the current strategy.

But the valuation model says “NO, that won’t do anything to prices”.

For the valuation model, price is independent of starts, foreclosures or sales, in fact it’s price that drives those variable, and that’s driven by nominal GDP, long-term interest rates and the inevitability of Farrell’s Rule with the only possible way out of the loop being to implement “Surprise-Free Valuation Standards” (as was argued in UK Housing Market Will Not Bottom Before 2012) .

Not that there is anything wrong with economic theories, just they often confuses cause with effect which has the tendency to send people in the wrong direction, like when Allan Greenspan pushed down interest rates so that we could all enjoy a “bit of froth”. And very tasty froth it was too! Thanks Allan.

Here’s why:

Logically price drives starts (I’ve done development, you don’t start when prices are in a hole unless you have a theory and an inside track to a banker (preferably a bent one), that much I know).

So I think it’s safe to assume that the logic in RGE’s argument is that if starts are falling then the market knows something. Well no contest there; I say price drives starts too; just I get to starts via price rather than the other way around…cause and effect.

You can say what you like about foreclosures but my view is that they are driven by either price or GDP (which in turn drives my model – i.e. there could be cross correlation), and that if foreclosures are to some extent, driving price down (the conventional wisdom amongst economists), then the effect is part of a feedback loop ( The U.S. Housing Market Economic Double Negative Feedback Loop) .

Now the trajectory is down, that’s a different ball game. Sure also, constraints on lending slow sales, but the valuation model seems to suggest this doesn’t do anything to price when prices are falling (people just don’t move).

It’s a small point but what that says is that bailing out distressed mortgages and getting Fannie and Freddie to be irresponsible again won’t affect prices, but it might affect GDP in the long term (negatively).

Predicting Foreclosures

In October I put up a chart based on combining some data that I found on the FT website on foreclosures by State, with some other data I trawled up on GDP growth by State.

Basically foreclosures shoot up when GDP growth goes down below 1%. If average GDP growth goes down to -3.4% (real) it looks like we may be having the fun of accelerating foreclosures some time soon (which, now that GDP has started to tank, seems to be happening – ummm….could the two be related?)

So cause and effect, either (a) falling GDP drives foreclosures (b) foreclosures drive GDP down (c) there is a feedback loop or (d) foreclosures and GDP are independent and a 65% R-Squared is just a chance occurrence?

My view is (a) with a bit of (c).

So by how much?

Well I know that you are not “supposed” to project outside the data, but just for a bit of fun I tracked back the best fit regression line to minus 3.4% GDP Growth.

Umm…oh dear I hope either the regression line that predicts foreclosures from GDP or GDP from foreclosures (or a bit of both) doesn’t mean that at minus 3.4% GDP foreclosures will pop up to 40%.

Or if that’s the story I hope that Nouriel Roubini is wrong about his GDP projections!

He’s been wrong before, he must have been; he’s an economist after all! Didn’t he say the crunch would happen before 2005, in which case perhaps his -3.4% GDP growth won’t happen before 2012…whew!!!

But maybe not…oh dear oh dear, and just for a bit of froth! There again it’s non-recourse debt so all those people pushed into negative equity can just jingle their way out of the hole. Thank God for that! Oh but oops…I almost forgot, what about the securities?

Don’t worry we will get the Chinese and the SWF’s to bail us out, no problem! And if that fails there is always the grandchildren.

Right now house prices in USA are under-valued (below the long-term equilibrium line), but unless there is REAL CHANGE they will keep going down as increasingly jingle-mail becomes the only option.

So HAPPY TIMES… 40% to 44% peak to trough and (perhaps) 40% foreclosure on home mortgages, here we come!

Yup I think that Cowboy George deserves a long rest, and although the new guy is possibly the first US President in a long time that anyone felt like dancing in the streets about, I must say, last time I saw him on TV he did seem to have a look like “darn…what have I let myself in for?”

It’s one thing to run a brilliant election campaign; it’s another to run the can of worms that the US Government has evolved into.

The numbers on inflation, the real size of the government’s liabilities, and the “efficiency” with which money is funneled out of the back door to special interests; these are all manipulated by a shadowy tribe of vampires. And the hastily concocted “Stimulus Plan” just plays into their hands.

Right now there is only one number in USA that the manipulators of power can’t (presently) get their hands on. That’s how much people will pay for a house in a free and open market.

For years Fannie and Freddie distorted that number (they were set up so people could afford to own homes, their effect was to radically increase the price of housing – figure that one out), but eventually that proved to be an unsustainable scam. Ask the Master Scammer Mr. Madof, he knows, eventually every scam runs out of money.

Fannie and Freddie “temporarily” ran out of money, sure they were dressed up as instruments of the Free Market, maybe before 1987 when they changed the accounting rules for measuring inflation they were, but from that point they became instruments of crony capitalism that sucked all the blood out of America.

If CHANGE is really the objective then in Washington nothing changes, the words are the same, “FOLLOW THE MONEY”. And make sure it’s counted properly.

Forget about US GAAP and IFRS, there is only one tool that properly values assets and liabilities, a silver stake that can tear out the heart of the vampires.

It’s called International Valuation Standards.

IF you really want “CHANGE”, THEN use that tool.

By Andrew Butter

Andrew Butter is managing partner of ABMC, an investment advisory firm, based in Dubai ( hbutter@eim.ae ), that he setup in 1999, and is has been involved advising on large scale real estate investments, mainly in Dubai.

Baby Boomers- Your Generation’s Crisis Has Arrived

“There is a mysterious cycle in human events. To some generations, much is given. Of other generations, much is expected. This Generation has a rendezvous with destiny.” Franklin Roosevelt – 1936

President Roosevelt was correct. The generation he was speaking to was already dealing with the worst financial crisis in the history of the United States, the Great Depression. By 1945, over 400,000 of this generation had lost their lives. Another 600,000 men were wounded. Much was expected and much was sacrificed. Every generation has a rendezvous with destiny.

The generation that won World War II passed the ultimate test and proceeded to produce the next generation, the Baby Boom Generation. Their rendezvous with destiny is underway. Will it be a rendezvous with history that results in World War III, the collapse of the Great American Republic, dictatorship, or a return to the original Constitutional principles upon which this country was founded? Many of you are probably thinking the idea of WW III, collapse or dictatorship is crazy. I’d respond with the wisdom of Kramer from the classic Seinfeld show.

Jerry: “Oh you’re crazy”

Kramer: “Am I? Or am I so sane that you just blew your mind?”

Jerry: “It’s impossible”

Kramer: “Is it? Or is it so possible your head is spinning like a top?”

Jerry: “It can’t be”

Kramer: “Can’t it? Or is your entire world just crashing down all around you?”

As a student of history I’m drawn to the concept of cycles. It is comforting to think that history has recurring patterns and a natural rhythm. Trying to figure out why the major events in history occurred is complex, challenging and fascinating. When I read an updated 1997 article by Doug Casey in December on John Mauldin’s site called Foundations of Crisis , I was blown away. Mr. Casey had read the book The Fourth Turning by William Strauss and Neil Howe and made some forecasts of what would happen in the next few years. They were eerily accurate, including an airliner being purposefully crashed into a government building to trigger a crisis. After reading this article I’ve been trying to wrap my arms around the implications of their theory and the possible consequences for the United States. I know that an individual can learn from the past. I’ve always thought that poet George Santayana’s quote, “Those who cannot remember the past are condemned to repeat it”, is profound and worth studying.

The crucial issue is whether societies as a whole are capable of learning from the past or are they condemned to the inevitable cycle of history. Can an individual change the course of history? Was World War II inevitable, even if Adolph Hitler had been killed during World War I? Is there anything that can be done to avert the cyclical crisis that seems to arrive on a consistent basis throughout history? Is our destiny already preordained? Mr. Strauss and Mr. Howe wrote the following words in 1997 :

Based on historical patterns, America will hit a once-in-a-century national crisis within the decade…’like winter,’ the crisis or ‘fourth turning’ cannot be averted. It will last 20 years or so and bring hardship and upheavals similar to previous fourth turnings, such as the American Revolution, the Civil War, the Great Depression and World War II. The fourth turning is a perilous time because the result could be a new ‘golden age’ for America or the beginning of the end. It all will begin with a ‘sudden spark’ that catalyzes a crisis mood around the year 2005.

I don’t have a preconceived notion of our country’s destiny, but I’m getting a bad feeling about the track we are on. The last thing in the world I want to see is my three boys being forced into a war caused by a bunch of clueless 60 year old political hack morons in Washington DC fulfilling their destiny to cause the once in a century national crisis. Based on the foolish actions of most politicians in Washington over the last thirty years, I fear for the future of our country. I don’t think the politicians in Washington comprehend the state of affairs. I sense the mood of the country turning. Fear, anger and disillusionment are the prevalent themes. Change is coming, but it is not the change that Barack Obama campaigned for. It will be forced upon us by circumstances beyond any one person’s control. While we are hurtling towards our summit with destiny, Congress continues its path of pork barrel spending, short term solutions, party politics, and condemning our children and grandchildren to a lower standard of living. The “leaders” of this country are using the tried and true method of using fear to ram through their $900 billion tax on future generations. President Bush used the same fear tactics to launch his invasion of Iraq. I see a similar success story with the coming stimulus package. Maybe the coming crisis will ultimately lead to Great Leaders rising to the occasion.

THE FOURTH TURNING

Strauss and Howe believe that history is marked by 80 to 100 year cycles which match the lifespan of most human beings. These cycles are discernible by four generations of 20 to 25 years that show remarkable consistency over history. I’m sure this theory will anger the individualists out there. They are not saying that everyone within a generation acts alike, but are shaped by joint experiences and time period in history. According to Strauss and Howe:

Turnings last about 20 years and always arrive in the same order. Four of them make up the cycle of history, which is about the length of a long human life. The first turning is a High , a period of confident expansion as a new order becomes established after the old has been dismantled. Next comes an Awakening , a time of rebellion against the now-established order, when spiritual exploration becomes the norm. Then comes an Unraveling , an increasingly troubled era of strong individualism that surmounts increasingly fragmented institutions. Last comes the Fourth Turning , an era of upheaval, a Crisis in which society redefines its very nature and purpose.

They are able to trace these turnings back to 1500 with remarkable consistency. They have broken U.S. history into the following cycles of history: Revolutionary Cycle (1701-1791), Civil War Cycle (1792-1859), Great Power Cycle (1860-1942), and the Millennial Cycle (1943-2???). Within these cycles are four distinct generations, that have a consistent persona because their parents had similar views, they listened to the same music, read the same books, were taught the same curriculum, were bombarded with the same marketing messages, and experienced the same set of unique experiences. Even though every Baby Boomer is not alike, the sheer size of this generation of 76 million people has left a dramatic imprint on history. The shared experiences of this cohort are clearly visible as they have marched through the cycle of history. The four typical generations within a cycle as described by Strauss and Howe are:

Prophet/Idealist

A Prophet (or Idealist) generation is born during a High , spends its rising adult years during an Awakening , spends midlife during an Unraveling , and spends old age in a Crisis . Prophetic leaders have been cerebral and principled, summoners of human sacrifice, wagers of righteous wars. Early in life, few saw combat in uniform. Late in life, most prophets come to be revered as much for their words as for their deeds.

Nomad/Reactive

A Nomad (or Reactive) generation is born during an Awakening , spends its rising adult years during an Unraveling , spends midlife during a Crisis , and spends old age in a new High . Nomadic leaders have been cunning, hard-to-fool realists, taciturn warriors who prefer to meet problems and adversaries one-on-one.

Hero/Civic

A Hero (or Civic) generation is born during an Unraveling , spends its rising adult years during a Crisis , spends midlife during a High , and spends old age in an Awakening . Heroic leaders are considered to have been vigorous and rational institution-builders, busy and competent in old age. All of them entering midlife were aggressive advocates of technological progress, economic prosperity, social harmony, and public optimism.

Artist/Adaptive

An Artist (or Adaptive) generation is born during a Crisis , spends its rising adult years in a new High , spends midlife in an Awakening , and spends old age in an Unraveling . Artistic leaders have been advocates of fairness and the politics of inclusion, irrepressible in the wake of failure.

This concept of 100 year cycles consisting of four generations is very logical to me. It all seems so theoretical and quaint until you realize that if they are right, we have just entered The Fourth Turning, a period of upheaval, crisis and enormous societal and possibly worldwide change. This is not a normal cyclical recession and bear market. There are much larger forces at work. Washington politicians are so consumed with their short-term election politics, power plays, enrichment of supporters, and letting lobbyists write our laws, they are incapable of seeing the real gathering storm that is about to engulf them. They go about their day to day horse trading and fooling the public with rhetoric, while a crisis of epic proportions is looming just over the horizon.

100 YEARS TO LIVE

The recent song by the group Five for Fighting called 100 Years reflects the 100 year cycle that all humans live through.

15 there’s still time for you
Time to buy and time to lose
15, there’s never a wish better than this
When you only got 100 years to live
I’m 33 for a moment
Still the man, but you see I’m a they
A kid on the way
A family on my mind
I’m 45 for a moment
The sea is high
And I’m heading into a crisis
Chasing the years of my life

The lyrics heading into a crisis couldn’t be truer today. We are only on this earth for 100 years. Why shouldn’t every person want to leave the earth a better place than they were born into? Instead, the world has periods of advancement and periods of regression, periods of peace and periods of war, periods of awakening and periods of crisis.

The last 150 years in American history as segmented by Strauss and Howe is charted below. Each generation experiences the four turnings at a different time in their lives. An appreciation of past turnings may give us clues to what will befall our country in the next 20 years.

Great Power Saeculum

Missionary Generation

Prophet (Idealist)

1860–1882

The indulged home-and-hearth children of the post-Civil War era. They came of age as labor anarchists, and campus rioters. In the 1930s and ‘40s, their elder elite became the “Wise Old Men” who enacted a “New Deal” (and Social Security) for the benefit of youth, led the global war against fascism, and reaffirmed America’s highest ideals during a transformative era in world history.

Lost Generation

Nomad (Reactive)

1883–1900

The Third Great Awakening was a period of religious activism in American history from the late 1850s to the 1900s. It affected pietistic Protestant denominations and had a strong sense of social activism. It gathered strength from the postmillennial theology that the Second Coming of Christ would come after mankind had reformed the entire earth.

G.I. Generation (aka Greatest Generation)

Hero (Civic)

1901–1924

As young adults, their uniformed corps patiently endured depression and heroically conquered foreign enemies. In a midlife subsidized by the G.I. Bill, they built gleaming suburbs, invented miracle vaccines, plugged “missile gaps,” and launched moon rockets.

Silent Generation

Artist (Adaptive)

1925–1942

Grew up as the suffocated children of war and depression. They came of age just too late to be war heroes and just too early to be youthful free spirits. Instead, this early-marrying Lonely Crowd became the risk-averse technicians and professionals—as well as the sensitive rock ‘n rollers and civil-rights advocates—of a post-crisis era in which conformity seemed to be a sure ticket to success.

Millennial Saeculum

Baby Boom Generation

Prophet (Idealist)

1943–1960

Basked as children in Dr. Spock permissiveness, suburban conformism, Sputnik-era schooling, Beaver Cleaver friendliness, and Father Knows Best family order. They came of age rebelling against the worldly blueprints of their parents. Youth pathologies worsened—and SAT scores began a 17-year slide. In the early 1980s, many young adults became self-absorbed “yuppies” with mainstream careers but perfectionist lifestyles. Entering midlife (and national power), they are trumpeting values, touting a “politics of meaning,” and waging scorched-earth Culture Wars.

13th Generation (aka Generation X)

Nomad (Reactive)

1961–1981

Survived a “hurried” childhood of divorce, latchkeys, open classrooms, devil-child movies, and a shift from G to R ratings. They came of age curtailing the earlier rise in youth crime and fall in test scores—yet heard themselves denounced as so wild and stupid as to put The Nation At Risk . In jobs, they embrace risk and prefer free agency over loyal corporatism. Politically, they lean toward pragmatism and non-affiliation, and would rather volunteer than vote.

Millennial Generation

Hero (Civic)

1982–200?

As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parental styles and recasting babies as special. Child abuse and child safety became hot topics, while books teaching virtues and values became best-sellers. Today, politicians define adult issues (from tax cuts to deficits) in terms of their effects on children.

New Silent Generation

Artist (Adaptive)

200?–

This generation is the first to be born in a digital world and is currently in grade school. This new generation is being molded from the outset to be unique, with a focus on advanced second-hand interactive learning techniques. The result being Gen Z children are exposed to an environment that is heavy on stimuli, and weaker in interpersonal relationships.

Sources: Wikipedia & The Fourth Turning

THE FIRST TURNING – THE HIGH (Spring)

The American High in the 20th century began in1946 with unconditional victory in World War II. According to Strauss and Howe:

A HIGH brings a renaissance to community life. With the new civic order in place, people want to put the Crisis behind them and feel content about what they have collectively achieved. Any social issues left unresolved by the Crisis must now remain so. The need for dutiful sacrifice has ebbed, yet the society continues to demand order and consensus. The recent fear for group survival transmutes into a desire for investment, growth, and strength–which in turn produces an era of commercial prosperity, institutional solidarity, and political stability. The big public arguments are over means, not ends.

The mood of the country after World War II was joyous. America was left as the sole global power. Its industrial power was unsurpassed. Europe, Japan and the Soviet Union lay in shambles. The country settled into a period of prosperity and conformity. America was brimming with confidence.

We were confident that our democratic principles could be spread throughout the world. The American High lasted from the Truman presidency through the Kennedy presidency. As the youthful President Kennedy took office in 1961, anything was possible. We could put a man on the moon, defeat communism, and eradicate poverty. The symbol of this period would be the Disney World ride Carousel of Progress, a sterile world inhabited by animatronic people. This time period also gave life to the Baby Boom Generation. Their mouseketeers ears and Leave it to Beaver lives of the 1950’s were brought to an abrupt confidence shattering end with the assassination of John F. Kennedy in 1963.

THE SECOND TURNING – THE AWAKENING (Summer)

The Fourth Awakening of the great American Republic began in 1964. This episode is known as the Conscious Revolution. Strauss and Howe describe these phases in history:

An AWAKENING arrives with a dramatic challenge against the High’s assumptions about benevolent reason and congenial institutions. The outer world now feels trivial compared to the inner world. New spiritual agendas and social ideals burst forth, along with utopian experiments seeking to reconcile total fellowship with total autonomy. The prosperity and security of a High are overtly disdained though covertly taken for granted. A society searches for soul over science, meanings over things. Youth-fired attacks break out against the established institutional order. As these attacks take their toll, society has difficulty coalescing around common goals. People stop believing that social progress requires social discipline. Public order deteriorates, and crime and substance abuse rise.

The upheaval of the 1960’s took the country by surprise. The Vietnam War, assassination of Bobby Kennedy and Martin Luther King, campus riots, Kent State massacre, drug use, and promiscuous sex marked a vivid departure from the High. The older establishment was outraged by the personal liberation youth culture. Baby Boomers rebelled against everything their parents stood for. The Cultural Revolution was shocking to the older generation. Previous Awakenings in U.S. History were religiously based. The 1960’s and 1970’s were a tumultuous period that tore the fabric of American life apart. Instead of being led by mainstream religions, this Awakening was led by a Baby Boom generation that had been coddled and spoiled by their parents. Instead of turning to religion, they turned to self actualization. They became the self absorbed “Me Generation”.

The New Age teenage hippies of the 1960’s grew into selfish adults, more concerned by their professional careers, obtaining a Harvard MBA, acquiring the biggest McMansion, and graduating from a 200 Series BMW to a 300 Series BMW. As the country moved out of the 1970’s into a new era, individualism and ego enrichment became the dominant themes. The end of this Awakening period in 1984 was marked by the classification of the then 25 to 35 year old Baby Boom Generation as Yuppies. Young upwardly mobile professionals were characterized accurately in the movie The Big Chill, the novel Bonfire of the Vanities by Tom Wolfe and the TV show Thirtysomething . These were not flattering portrayals.

THE THIRD TURNING – THE UNRAVELING (Fall)

The latest Unraveling period in U.S. history began during the presidency of Ronald Reagan. His theme of “Morning in America” convinced most of the country that a new era of prosperity would lead to all boats rising. Strauss and Howe describe the traits during these periods:

An UNRAVELING begins as a society-wide embrace of the liberating cultural forces set loose by the Awakening. People have had their fill of spiritual rebirth, moral protest, and lifestyle experimentation. Content with what they have become individually, they vigorously assert an ethos of pragmatism, self-reliance, laissez faire, and national (or sectional or ethnic) chauvinism. While personal satisfaction is high, public trust ebbs amid a fragmenting culture, harsh debates over values, and weakening civic habits. The sense of guilt (which rewards principle and individuality) reaches its zenith. As moral debates brew, the big public arguments are over ends, not means. Decisive public action becomes very difficult, as community problems are deferred. Eventually, cynical alienation hardens into a brooding pessimism. The approaching specter of public disaster ultimately elicits a mix of paralysis and apathy.

The period between 1984 and 2001 was a period of peace and prosperity. President Reagan cut taxes, Paul Volcker defeated inflation, the Soviet Union collapsed, the stock market went up 1,000%, and MBA yuppies elevated to senior management positions on Wall Street. This interlude echoed the High of 1946 to 1964. The self involved Baby Boom Generation kept busy accumulating stuff. Their personal satisfaction is what mattered most. Gordon Gekko, the John Thain of his generation, uttered the words in the movie Wall Street that reflect the mood of the 1980’s. “Greed, for lack of a better word, is good.”

The 1990’s were dominated by cultural wars. The Republican Party and Democratic Party debate become extremely partisan. Public deliberations became harsh. Moral certitude was exuded by all sides of every issue. Hard driving overachieving narcissistic yuppies wearing Brooks Brothers suits and Rolex watches dominated corporate America. As twenty-eight-year-old Rob Lewis, a yuppie profiled in Newsweek , noted, yuppies were often willing to sacrifice “marriage, families, free time, relaxation.” He added, “Our marriages seem like mergers, our divorces like divestitures.”

The internet was going to change the world. Fraudulent IPOs were rolled out to the unsuspecting public. Day traders could get rich without working. Government did what it does best, spend money and defer all tough decisions to the distant future. A tough unpopular decision deferred is the path to reelection for a professional politician. The unwillingness to work together towards solutions that would insure that future generations weren’t left with the debts of the Baby Boom Generation, led to the current crisis being worse than it needed to be. As yuppies dashed down the streets of New York City, beating away on their crack-berries, on a sunny cool Fall morning, little did they know that their materialistic egotistical frenzied lives were about to change forever. With the tragic murder of 3,000 Americans in the Saudi led terrorist attacks of September 11, 2001, the Fourth Turning had arrived.

THE FOURTH TURNING – THE CRISIS (Winter)

We know how this Crisis period in our history began. We don’t know how it will end. Previous crisis periods in American history included The American Revolution (1773-1794), The Civil War (1860-1865), and the twin crisis of The Great Depression and World War II (1929-1945). All three period included wrenching highly destructive total wars. Will our current crisis period result in World War III?

Strauss and Howe describe the commonalities of most crisis periods:

A CRISIS arises in response to sudden threats that previously would have been ignored or deferred, but which are now perceived as dire. Great worldly perils boil off the clutter and complexity of life, leaving behind one simple imperative: The society must prevail. This requires a solid public consensus, aggressive institutions, and personal sacrifice. People support new efforts to wield public authority, whose perceived successes soon justify more of the same. Government governs, community obstacles are removed, and laws and customs that resisted change for decades are swiftly shunted aside. A grim preoccupation with civic peril causes spiritual curiosity to decline. Public order tightens, private risk-taking abates, and crime and substance abuse decline. Families strengthen, gender distinctions widen, and child-rearing reaches a smothering degree of protection and structure. The young focus their energy on worldly achievements, leaving values in the hands of the old. Wars are fought with fury and for maximum result.

Every crisis period has been initiated by a catalyst. The passage of the Stamp Acts started the American Revolution, the election of Abraham Lincoln sparked the Civil War and the Stock Market Crash of 1929 initiated the Depression/WW II crisis. If history is our guide, the Iraq and Afghan Wars will not be the only wars during this crisis epoch. Many challenges lie ahead. I don’t think the majority of Americans are ready to meet these challenges.

Winter Has Arrived

Strauss & Howe wrote the following words in 1997:

America feels like it’s unraveling. Though we live in an era of relative peace and comfort, we have settled into a mood of pessimism about the long-term future, fearful that our superpower nation is somehow rotting from within. The America of today feels worse, in its fundamentals, than the one many of us remember from youth, a society presided over by those of supposedly lesser consciousness. We yearn for civic character but satisfy ourselves with symbolic gestures and celebrity circuses. We perceive no greatness in our leaders, a new meanness in ourselves. Each new election brings a new jolt, its aftermath a new disappointment.

The Prophet Generation is the elder statesmen as we begin this secular crisis. George W. Bush was born in 1946. He is the eldest of the Prophet/Baby Boom Generation. Barack Obama was born in 1961 at the very end of the Baby Boom Generation. These two men have or will lead the United States through most of this crisis stage. George Bush and his cohort of neo-conservatives and their drastic overreaction to the terrorist attacks of 9/11, have set the stage for the most dangerous crisis in U.S. history. A Crisis always results in the appearance of strong leaders. George Washington, Abraham Lincoln, and Franklin Roosevelt rose to the occasion during our previous Crisis episodes. Strong does not always mean wise, thoughtful or right. George Bush exhibited strong leadership during his tenure. Wisdom and thoughtfulness were not two of his better traits. Barack Obama is a smart man and has exhibited some strong leadership skills in his initial weeks in office. He has also exhibited an ability to exaggerate threats to get what he wants. Will he rise to the level of Washington, Lincoln or Roosevelt?

On the day George Bush took office, he inherited an annual budget surplus that was the result of gridlock in Washington and PAYGO restrictions on Congressional spending. The National Debt stood at $5.7 trillion and our unfunded future liabilities for Social Security, Medicare and Medicaid stood at $20 trillion. We had not been at war for nine years. Today, our National Debt is $10.7 trillion, poised to rocket above $13 trillion in the next year. Our unfunded liabilities now total $53 trillion as President Bush signed a prescription benefit plan expansion that added $8 trillion to our grandchildren’s burden. Since 9/11 almost 5,000 Americans have died in battle, with 50,000 Americans wounded. We’ve spent $800 billion, so far, on a war that didn’t need to be fought. Untold thousands of Iraqi and Afghan civilians have been killed or wounded, despite the fact that none of the 9/11 terrorists were from Iraq or Afghanistan. Fifteen of the nineteen hijackers were from our “staunch ally”, Saudi Arabia.

The acts of a terrorist organization consisting of less than 2,000 members resulted in actions by an American President that resulted in declining American moral influence throughout the world, increased terrorism around the world, budget deficits that threaten the very existence of our capitalistic system, and an American public that is angry, disillusioned and confused. Doug Casey in 1997 described the future actions of George Bush to a tee. “ The Boomers in Elderhood will be dogmatic, harsh, puritanical, and quite willing to burn down the barn in order to destroy whatever rats they see.”

Domestically, the period from 2001 to 2008 could be described as “Boomers Gone Wild”. Boomers in their 40’s and 50’s now dominate society, as they have assumed the positions of power in government and business. Based on what they have accomplished so far, I truly fear for what comes next. After 9/11, President Bush urged Americans to spend to defeat terrorism, while Alan Greenspan lowered interest rates to historically low levels. This was like waving a red cape in front of a bull. The materialistic, self actualizing, individualistic Boomers went on the grandest borrowing and spending spree in the history of the world. Their mission: Save the world from terrorism by buying a 6,000 sq ft McMansion, the largest HDTV, the biggest Hummer, and most expensive Rolex. Boomers running Wall Street were happy to oblige with loans and complex derivatives to finance the Mardi Gras like celebration of capitalism.

The aftermath of the eight years of partying is, not surprisingly to some, the greatest hangover in the history of the world. There are 19 million vacant homes, 10% of all homes in the U.S. are in foreclosure, 20 million homeowners are underwater with their mortgage, $30 trillion of consumer wealth has be obliterated, the savings rate dropped below zero, consumer debt levels are at historic levels, and the banking system is insolvent. The Boomer economists, like Paul Krugman, are sure they have the answers (they don’t) and the current bank bailout tab has already reached $9.7 trillion. You have to hand it to Americans, we truly believe bigger is better. If this is the easy part of the twenty year crisis, I’m not looking forward to the hard part.

Winter of Our Discontent

We enter 2009 and the Presidency of Barack Obama with citizens pessimistic about the future of our country. The public has lost faith in government, financial institutions, and religious institutions. Distrust of politicians, bankers, CEO’s, financial advisors, and moral leadership is well founded. The popular culture of over hyping public figures and then tearing them down has led to everyone and everything being discredited. The personal and public choices that will be required in the next few years will be harsh. Moral courage and leadership is what is needed. As I watch the likes of Barney Frank, Nancy Pelosi, Rush Limbaugh, and Sean Hannity work their rhetorical magic, it is clear that we have a major deficit in wisdom, courage and leadership. Instead of analyzing how we got here and how we want the country to be in ten years, when this crisis has past, we are focused only on specific right wing or left wing agendas and how to position ourselves for the next election cycle. The short sightedness of our current leadership will lead to the next more dangerous phase of this crisis.

Congress will pass a stimulus bill with wave pools, Frisbee golf courses, digital TV coupons, tax incentives to borrow money and buy houses and cars, and billions more of pork in the next week. The bill is being sold as an infrastructure bill despite the fact that only 5% of the bill is for infrastructure. President Obama will sign it. The second helping of TARP will be dished out to banks, insurance companies, automakers, and people who bought more house than they could afford. It is tough to predict what will happen in the next week, let alone the next decade. Here is my best guess:

The stimulus bill will grow to $900 billion (this is how Senators & Representatives compromise) and be passed on party lines, with virtual Democratic Senators Specter and Collins showing their true colors and providing the deciding votes. President Obama will use fear tactics, convincing the non-thinkers that inhabit most of America that not passing this bloated pig of a bill will result in a permanent Depression. I’d love to find out which economists told him this would happen. Every dime of this stimulus package will be borrowed from foreign countries and be paid for by increased taxes on future generations. An unfunded tax decrease or spending increase is a tax increase for our children and grandchildren.

Timothy Geithner, our TurboTax expert Treasury Secretary, will introduce the sixth variation of the TARP program since we were told it had to be done to save the world from collapse. It will not do what needs to be done. Smoke and mirrors will not pay off debt. The bankrupt financial institutions and corporations (Citigroup, Bank of America, General Motors, Chrysler) must be put into receivership and their shareholders wiped out. Good banks should take over from bad banks. Corporations with sound management and viable business plans should prosper. Corporations that sell every product at a loss, financed by its subsidiary at a further loss, must go out of business.

We are in the midst of a Global recession. Every country in the world is decreasing their interest rates, trying to devalue their currency, protecting domestic businesses, and subsidizing domestic employment. Every politician on the planet is playing to their constituents with protectionist rhetoric and actions. There are Buy American clauses in the stimulus package. French President Sarkozy has been ratcheting up protectionist ideas. Calling your biggest lender a currency manipulator months before you will need to borrow an additional $2 trillion is probably not a bright idea. Our new Treasury Secretary did just that last week. Protectionist measures will lead to retaliation and a worsening global economy.

The Federal Reserve has doubled their balance sheet in the last year. They’ve done this by printing $1 trillion. They will double their balance sheet again if that is what it takes to generate inflation. They have bought toxic assets from banks but will not reveal the banks or assets they’ve bought, to the public. They work for taxpayers, not vice versa. Pundits on CNBC casually say that the Fed can just print money and everything will be OK. Their words prove that the Federal Reserve System is just the BIGGEST PONZI SCHEME ever perpetrated on the U.S. public by bankers in conspiracy with government. The Federal Reserve chairman Bernanke did not see this crisis coming. He thought we had a strong housing market, when any impartial observer, such as Robert Shiller, proved that we were three standard deviations too high. Mr. Bernanke will succeed in igniting inflation. He will not see it coming and as a political animal, will not pull the punch bowl away before the party gets going. Inflation will get out of control within three years.

The annual deficit for 2009 will exceed $2 trillion. The government bean counters haven’t realized that people without jobs don’t pay taxes and companies with no profits don’t pay taxes. When you bring in less tax income, increase spending, and send out tax rebates to all Americans, deficits tend to rise. In the next two years the National Debt will exceed $15 trillion. GDP is headed in the opposite direction and will drop below $14 trillion in 2009. At this rate of increase, we’ll be approaching the debt to GDP ratio of 120% reached during WW II by the end of the Obama Presidency. This increase in debt combined with the enormous printing of dollars by the Federal Reserve will drive the value of the dollar down. The only question is whether it will go down slowly or violently.

The U.S. has been dependent on Japan, China, and the Oil exporting countries to purchase our debt in the last ten years. Japan has entered recession and will need to stimulate their economy. Social unrest is growing as factories shut down in China. The government has begun domestic stimulus programs and will need more. Oil revenues have dropped 70% in the last year for the oil exporting countries. With their own domestic issues and U.S. Treasuries yielding 3% to 3.5% and U.S. annual funding needs of $2 trillion, demand is likely to wane. The only possibility is dramatically higher rates. High interest rates devastate a heavily indebted country.

Oil prices below $40 a barrel will lead to a deepening of this crisis in the not too distant future. At these prices it is no longer profitable to develop alternative fuels and search for new supply. Rigs are being shutdown, deepwater projects cancelled, shale and oil sands projects being delayed, and natural gas exploration dramatically scaled back. The fact remains that the world has reached peak oil supply. The Saudi wells are 50 years old and are depleting rapidly. Mexico’s Cantarall oil field is in rapid decline and Mexico, the supplier of 12% of U.S. supply, will become a net importer in five years. The drastic decline in oil revenue will further exacerbate social unrest in a country on our border. The complete lack of a comprehensive energy plan will result in oil prices exceeding $200 a barrel in the next five years. Politicians will blame oil companies and the Arab countries, further alienating us from the world.

The Military Industrial Complex will grow stronger. We have no intentions of leaving Iraq and we will double our presence in Afghanistan. The Defense (should be called Offense) budget will increase. We will be told that the Russian threat is growing. We will be told that China has aggressive intentions and that Iran threatens the Middle East. The public will go along because they don’t think for themselves. We will be told that the Defense industry generates American jobs. As the government identifies false threats, they will take away more rights and liberties in the name of protecting us. It will be gradual and almost unnoticeable to the Average American, but it is happening. A stronger more powerful Military will want to prove itself. They will be itching for action. When you are a hammer, everything looks like a nail.

Boomer leaders are always sure, and often wrong. They are dogmatic and cocky. They utter the words catastrophe, without specifying what will happen if you don’t follow their plan. They say that we will enter a permanent decline if we don’t spend our way out of a situation that was caused by spending too much. Boomer followers are so shallow and self involved that they will put reason aside and believe that we can spend our way out of this. The easy sound bite solution is what they are looking for. The word sacrifice does not exist in their vocabulary. The well being of future generations is of no interest to them. The day trading, house flipping, BMW driving Boomers are looking for the next big thing. The danger is that the next big thing could be a major war. They are too old to fight, but they are not too old to send others to their death.

The stimulus package and TARP 6 plan will be implemented. The economy will not improve. By the Fall, Obama and the Democratic led Congress will push through trillions more in spending. The dollar will continue to fall versus gold. As the deficits grow and foreigners buy less and less of our debt, interest rates will rise. Oil will gradually rise as long as no external event causes it to spike. Protectionism will increase, leading to declining world trade. When we have not pulled out of this downturn in 2010, people will realize we are in a Depression and politicians have lied to them again. Social unrest will grow. Riots are likely to break out in poor urban areas. Governments always react to internal strife by seeking an external threat.

The external threat could be anything. Russia could invade Ukraine. Israel could attack Iran. When oil reaches $200 a barrel, disputes over drilling rights in the Arctic with Russia or China could cause a confrontation. Oil is the lifeblood of our society. If major shortages occur in the U.S. it would bring the country to a grinding halt. The panic would be so drastic that our Leaders will use every means at their disposal to get more oil. With the most powerful military on the planet at their disposal, and itching for a fight, our Leaders will manufacture a reason to go to war in order to secure oil supplies. The problem with waging a major war is that you need troops to sacrifice. The volunteer army will not do. When the government tries to reinstitute the draft, the fabric of this country will be torn to shreds. This will be where I get off this merry-go-round ride.

In ten years my sons will be 25, 22, and 20. They will not be sacrificing their lives for oil, bankers, corrupt politicians, and Defense industry CEOs. If I see the future developing as I fear, I will move my family out of this country to a place where individual liberties are respected, sound fiscal policy is practiced, and people can live in peace. I don’t know if that place exists, but I’ll be looking.

The good news is that every modern Crisis has been followed by a new High. Of course, in every modern U.S. Crisis we had a strong leader. Will Barack Obama be that strong leader? If no strong wise leader emerges, could we follow the path of the Roman Empire? Can we as individuals change the course of history? I don’t know the answers to these questions. It is up to each of us to analyze the facts and act accordingly. A recent song by The Fray, You Found Me, asks the question we will all need to answer.

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

U.S. and European Economies Accelerating Decent into Marxism

Introduction – The descent into MARXISM is accelerating at a startling rate. Public servants and blind ideologues are stopping at nothing to achieve CREEPING CONTROL over the private sector of the United States of America. As the US economy continues to plummet, the mainstream media continues to talk about GREEN shoots and recovery to get the sheeple, er … people to FEEL GOOD long enough to get their plans ENSHRINED in law. Once passed, never repealed, and essential to your future security.

I refer to nationalization of the health care system and something called the American Clean Energy and Security Act of 2009. A nice title to garner support from the functionally illiterate products of the public schools who can neither think logically, nor have any knowledge of history or any interest in the facts behind the headlines. The resulting outcomes are EXACTLY the opposite of its title, as it moves the United States further and further from energy security. Only the most HOPEFUL can believe the government can solve their healthcare and energy problems. You can expect costs to increase 100 to 1,000% once they have worked their SOLUTIONS.

Look no further than Fannie Mae, Freddie Mac, AIG, the Post Office, Medicare, Medicaid and social security to see what healthcare and the energy industry will become, because consuming more than you produce increasingly expands into these areas of the economy. These are known in China as “STATE OWNED ENTERPRISES” since they are permanent wards of the state, never profitable, can’t compete in the marketplace except through mandates of market share, and only kept open to provide employment to avoid civil unrest or to reward a primary constituency. It is a good description of what’s unfolding in Amerika, er … America.

Who pays for this? Not the government, not Congress, not the President: you do! I predict GM and Chrysler will NEVER make a penny of profit again and the cars they make will sell only because they will pass laws and regulations forcing you to purchase them, rather than that be of your own choosing. Why compete if the owners of the company can just pass a law and force market share to themselves? You can look for this to increasingly unfold as Chrysler and GM continue making cars that MANY DO NOT WANT. Politics is clearly at work as revelations that all the Chrysler dealers who supported the GOP were the ones that GOT THE AXE! Illinois politics on a national level.

Radical environmentalists are IN CONTROL of the federal government, and US domestic oil and gas production is under full scale assault from our overlords (and their campaign supporters) in Washington, D.C. America exports hundreds of billions of dollars a year for imported oil. This was a prime issue in the last election in which BOTH parties PROMISED to allow domestic energy development. A case of amnesia has descended and now the prospects for keeping more of those exported dollars at home creating domestic resources and jobs is UP IN SMOKE. While they were at it, they have brought the domestic mining industry to a virtual halt as well, TO PROTECT YOU.

Can you imagine ANY public servant not believing in maximizing domestic production of energy, FUELS and natural resources for domestic use? What do you think we will do when the dollar is worthless and we have to buy these supplies in something other than dollars? Do you think we will be secure then? Do you think wind, solar and biofuels will substitute? Traditional domestic power generation is also being prohibited from development and new nuclear, coal and oil generation is on the cusp of being regulatory casualties and virtually OUTLAWED.

The existing energy industry is about to have their profits confiscated through the above mentioned legislation and their capital REDIRECTED to primary supporters of the Administration and Congress, into industries such as ethanol and green energy, which will NEVER produce more than they consume in capital. This is misallocation of precious capital to MALINVESTMENTS which will NEVER pay for themselves or turn a profit. Who pays for this? Not Congress. The public, aka “you” do!

They call this WISDOM in Washington and the DEATH of common sense on MAIN STREET, unless you have been brainwashed by the mainstream media, public schools and CRONY capitalists who are SET TO FEED at the public trough, aka YOUR WALLET. You know who they are as they appear with politicians and sing the siren song of GLOBAL WARMING, a hoax on the uninformed and functionally illiterate who fall for this new version of the “TAXMAN in DISGUISE”!

The Banks

The banking system is as INSOLVENT as it was last week, last month, last year and two years ago. Eviscerating FASBY 157 did not change the losses sitting on their balance sheets or the lack of dealing with them. Most, if not all, of the PROFITS from the first quarter came from a little accounting sleight of hand that lets you record a profit when the value of outstanding bond issues declines (issued debt from the bank). For example, let’s say a Citigroup bond is priced at 70 on January 1, 2009, and on April 1, the bond is trading at 63, a loss of 10% for the bondholder; but Citigroup gets to record a PROFIT of an equal amount, because if they bought the debt back on April 1, they would have paid less to their lender. Of course they DID NOT buy the bond back, which would have actually been a profit, but they get to BOOK the profits anyway. NO MATTER in the eyes of the accounting regulators, it still counts.

The stress tests were and are a joke. When they did not fall into the areas of solvency which the 19 banks desired, they just argued their way to values they could accept. The regulators are obviously CONTROLLED by those that they regulate. NO NEWS in that supposition. Let’s look at lobbying and CAMPAIGN contributions from a recent Wall Street Journal article leading up to the political pressure on the Financial Accounting Standards Board until they changed the rules in late April;

Congress Helped Banks Defang Key [Accounting] Rule!

This is a partial list of fiscally and morally bankrupt lawmakers and financial industry associations colluding to FOOL the public as to the solvency of the financial institutions. The total lobbying expense ($27,571,656) and CAMPAIGN ($285,851) is $27,857,507, which is a cheap price indeed to mask trillions of dollars of losses and their fiscal and moral bankruptcies. All are Benedict Arnolds, public servants and the Oligarch industry trade groups. It is just amazing how thoroughly controlled the beltway is by the banksters, er …bankers. In addition, everyone talks about the capital ratios and tangible equity levels. They are a joke, as in January, HUNDREDS of BILLIONS of OFF BALANCE SHEET toxic assets fall back onto BIG BANK balance sheets, instantly puncturing the illusions now being put into the headlines.

Take look at these unfolding categories of lending distress which are from the New York Times:

These loans are at record “all time highs” in terms of defaults and are not going to be turning around any time soon. In fact, all categories of credit deterioration can be expected to accelerate into the fall, as the federal government SUCKS the life out of the private sector with their borrowing requirements. This means less ability for the private sector to access, roll over and service credit. The belief that the worst is over for the banks is a fairy tale.

Whoever is buying their debt and equity is just the latest patsy. When they realize they have been DUPED by the US Treasury, the Fed and the Administration, watch what will unfold when HOPE turns to FEAR. Credit availability is crumbling, so credit cannot roll over. Look for acceleration in defaults throughout the rest of the year.

Deflation looms as nails in the coffins of lenders and borrowers:

The Fed and Treasury could care less about the borrowers (other than lip service), but the lenders own them. You can expect massive new amounts of money to be shoveled to them, in one way or another, in plain sight or hidden from view in off-balance-sheet transactions, of which it has been reported there are over $9 Trillion already.

“I’m an optimist by nature, but it’s perplexing because there are still problems out there,” said William Mutterperl, a lawyer at Reed Smith LLP in New York and a former vice chairman at PNC Financial Services Group Inc. “No one has suggested foreclosures are going down, and I don’t think anyone is saying loan quality is getting any better.”

Analysts at Moody’s Investors Service warned Tuesday that U.S. banks with debt that is rated by the Moody’s Corp. unit face about $470 billion in losses through next year. If the economy continues to suffer, those losses could swell to $640 billion, and Moody’s would likely accelerate its bank-debt downgrades.

“In such a scenario, absent continuation, and likely deepening, of U.S. government capital and liquidity support programs for the banking industry, numerous banks would be insolvent,” the Moody’s analysts wrote.

One executive at a New York bank said investors seem to be embracing any tidbit of good news, while ignoring red flags about banks’ ill health. He compared the industry with an intensive-care patient who has stabilized but remains critical. “A bucket of cold water will be thrown in people’s faces,” the executive said.

Additionally, household wealth and income HAS collapsed:

Throughout the G7, the insolvency is also percolating along: Spain, the UK, Germany and others hide behind their respective government regulators. Losses are just piling up day after day with NO RECOGNITION of the deteriorating COLLATERAL values or that of their secured and unsecured lending.

Look at Spain, which virtually HAS NOT recognized falling real estate mortgage values. I could not figure out how they dodged the bullet. Now it’s clear: they took it and NEVER REPORTED THE LOSSES. You can’t make this stuff up. It’s called regulatory forbearance, and it is now a virus THROUGHOUT Europe, as banksters and G7 public servants COLLUDE to fool and hide these issues from the public. Money printing is the only thing that can save these banks, borrowers and lenders and it will be done, by hook or by crook. Inflation is the only escape… When the true story is known about the moral and fiscal bankruptcy of the G7 financial and public servants’ actions during this time, the consequences will be a “Crack-up Boom”.

Command Performance

As investors around the world question the new Administration and Congress about their plans for funding the legislation they are implementing, Treasury Secretary Tim Geithner is in Beijing for a hastily-scheduled meeting with the Chinese. The Chinese are very good at math, having invented it thousands of years ago. Every investor in the world who holds dollars or treasury securities – both IOU’s – must be concerned. The Gang up on the hill in D.C. have shown no intention of changing their spending or legislative assault on the US economy, the dollar or the bond markets, purposely driving investors off a cliff. They are immoral, fiscally- and mentally-bankrupt public servants and their elite constituents and crony capitalists.

Treasury Secretary Geithner is not there for a polite tea party. He is being called on the carpet to clearly lay out Washington, D.C. spending and printing plans. I am sure they did not like the message, or his attempt to speak to them the way he does to the DUMBED-DOWN American electorate. He spoke at Beijing University about the virtues of risk-free securities known as Treasury Bills and Notes. When he finished his speech, the attendees LAUGHED! This is a very bad turn of events for the bozos in D.C. Basically he said: don’t worry, we will get responsible AFTER we print the money. I don’t think they laughed after that message.

Most people know of Professor Nouriel Roubini and his accurate diagnosis of the unfolding financial industry implosion. Years ago he was looked at as some nut, today he is recognized as some sort of seer, and here is what he sees now:

“If we’re going to finance budget deficits by printing money, we may have high inflation, even risk of hyperinflation in some countries. That’s what happened in Germany in the 1920s during the Weimar Republic. We are having large budget deficits and increasing the public debt, we don’t know whether it’s going to be $5 trillion or $10 trillion of more debt. But there are only a few ways of resolving that debt problem: either you default on it as countries like Argentina did; or you use the inflation tax to wipe out the real value of the debt; or you have to raise taxes and cut government spending. And given the size of the deficits, over time that’s going to be a painful political choice to make.” ~ Nouriel Roubini, May 24, 2009

It’s no choice at all for the fools on Capitol Hill as they say “we got the votes”, and now it is time for them to implement their perceived mandates for “change”, regardless of the COST. In addition to the budget deficits which will double the ON BALANCE SHEET borrowing, nobody is talking about the OFF BALANCE SHEET LIABILITIES which are mushrooming higher like a nuclear blast! Let’s take a look at the other inescapable issues and their costs if properly accounted for:

The recognized “cash based” numbers are set to double over the next four years, but the bigger columns of numbers are widely understood as the REAL extent of the liabilities by readers of this letter, as I have been reporting them for years along with many others. EVERYONE pretends they are not there, including the Chinese and all other Dollar holders. But these off balance sheet liabilities and accounting fictions are not limited to the US. This picture is woven throughout the fabric of the G7 and the EU to varying extents.

The venerable Art Cashin of UBS notes:

“On May 27th Moody’s said it had no plans to reduce America’s coveted AAA debt rating. But on the same day John Taylor, a professor at Stanford University and the creator of the Taylor rule on monetary policy, wrote in the Financial Times that the American government “is now the most serious source of systemic risk.”

Let’s look at the NEW run rate for borrowing by the US government:

It dwarfs the past deficits, and the Administration says they will address it AFTER a recovery has taken hold. If you believe that, I have a bridge to sell you, because there will be no recovery as the stimulus plan is a PERMANENT expansion of government, not a stimulus bill. Year over year, US government revenues have declined 34% through April. 50 cents of every Dollar spent is going to be borrowed. Try that with your personal finances. It’s absurd. So they will borrow the money and send you, foreign lenders and Dollar holders, the bill.

What do you think will happen if Treasury Bonds and Notes, as well as the Dollar, decline 20% in the next 6 months? What do you think foreign holders will do when confronted with these potential losses? The answer is self evident. I said it in the last newsletter: the US economy will be buried by the beltway, legislatively, over the next 6 to 8 weeks, thus guaranteeing a HYPERINFLATIONARY depression as incomes collapse, borrowing skyrockets, and the printing press is the only avenue of escape.

The debts and future liabilities are unpayable and it will end as has every other fiat currency and credit system since history began, through the soft defaults of the printing press. The idea that you can store wealth in worthless coupons called G7 money is false. You can store wealth in money as long as it exhibits these following functions.

Real Money has five functions, as:

A Medium of exchange

A Store of value

A Measure of value

A Standard of value

No one else’s liability

Imitation money has three definitions:

A Medium of exchange

Someone else’s liability

Supply which can be printed on paper at virtually no cost or created with a keystroke

The Chinese and many others ATTEMPT to store wealth in IMITATION money. You and they can’t. The Zimbabwe-ization of the G7 is unfolding right in front of us….

Wealth Creation

The deindustrialization of the US economy commenced just after the Korean War. At that time, America was the greatest industrial power in the world and over 30% of GDP was from manufacturing. Today, that percentage has declined to less than 10% and the wealth creation from those activities now comes from MISSTATED inflation masquerading as growth. The following was sent to me in an email. I do not know who wrote it, but it is true:

WHY AMERICA’S ECONOMY FELL OFF THE CLIFF

John Smith started the day early having set his alarm clock (MADE IN JAPAN) for 6 a.m.

While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG).

He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA).

After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) filled it with gas (FROM SAUDI ARABIA) and continued his search for a good paying AMERICAN JOB.

At the end of yet another discouraging and fruitless day checking his computer (MADE IN MALAYSIA), John decided to relax for a while. He put on his sandals (MADE IN BRAZIL), poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can’t find a good paying job in AMERICA.

And now he’s hoping he can get help from a president (MADE IN KENYA), Mr. Obama (Originally Born African Managing Americans).

Thank you, Mr. or Ms. Anonymous. Wealth is created when you produce more than you consume and accumulate capital and savings to invest in future production, and it has DIED in the G7. Real wealth creation from small business and entrepreneurs is moving toward extinction in the US, replaced by the printing press and BORROWING. It could not be recovered even if we wanted it to be, as American labor, corporate tax and regulatory policies are locally and globally uncompetitive. On top of which, the current Administration and Congress do not understand that the private economy must GROW to create rising incomes. Growth in government is not growth as politicians believe. If the government spends +12 % of GDP on new programs and the GDP contracts at -6%, then if the spending does not occur, the actual rate of economic decline is negative – 18 % (the Commerce Department measures government spending growth and calls it GDP growth even if the money is borrowed, an illusion of growth). An ever expanding leviathan government creates not one dime of new wealth or income taxes…only private sector jobs and businesses do…

The G7 economy is essentially still descending into an inflationary depression. The quantitative easing is flowing directly into financial and commodity markets seeking shelter from the unfolding blizzard of printed money of all stripes: Dollars, UK Pounds, Yen, Swiss Francs, and soon Euros. Today, Chancellor Angela Merkel of Germany BLASTED the G7 central banks for their policies of money printing. Kind of like the pot calling the kettle black, since the German banks are maybe the most insolvent and highly leveraged in the world. Trillions will need to be printed to rescue them before this crisis has passed.

In congressional testimony today, Fed Chair Ben Bernanke said the Federal Reserve WILL NOT monetize the debt, setting the stage for a showdown with the FOOLS on Capitol Hill and the President. His term is up in January, and he either buckles or he will be replaced by someone who will monetize it: i.e., Larry Summers, Chair of the President’s Council of Economic Advisors.

What happens when they do monetize the debt further? Contrary to his assertions… Be very afraid. This is slated to happen in the next 6 months as Treasury borrowing is set to explode to over $2 Trillion and many multiples of this number in the G7. Many of these auctions are bound to fail unless long-term interest rates skyrocket or quantitative easing is DRAMATICALLY accelerated.

The pickup in the housing markets has been halted by the backup in mortgage rates, so expect them to reaccelerate to the downside. Foreclosures are picking up as the foreclosure moratoriums end. Massive new supply and more expensive money will do this.

Incomes continue to plummet on all levels: Federal, State, Municipal, Corporate and individual, insuring the increasing distress in the Bond, banking, and financial communities. You can expect the insolvencies to accelerate as well as the defaults on the borrowing of all of the above.

Marc Faber is interviewed on www.Bloomberg.com and reports: Prices may increase at rates “close to” Zimbabwe’s gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabwe’s inflation rate reached 231 million percent in July, the last annual rate published by the statistics office.

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

The only way to stem the Dollar’s and Bond’s decline would be a flight to quality from a huge down move in stocks to create a perceived FLIGHT to quality. Be on the lookout for the groups (plunge protection team) monetizing the stock markets to quit doing so. They have largely accomplished the re-inflation of bank stocks to attract new patsies to FUND their unfolding insolvencies. It’s done and possibly so is the rally.

The bright side to this is VOLATILITY is set to rise again and “Volatility is Opportunity” in all markets. Investments with the potential to thrive in rising and falling markets should be considered. Just keep in mind that the G7 will “print the money”; on that you can be sure….

I will be doing several presentations on the unfolding “Crack-up Boom” and inflationary depression at FREEDOMFEST, July 9th through the 11th. I urge you to attend. You can find information at www.freedomfest.com. I will be meeting with people upon request. Just call me and let’s get together… Hope to see you there; last year was exciting.

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Please remember that subscribers generally receive Tedbits two to three days before it is posted on the web. Subscribers will also start receiving guest essays from leading economic pundits, and a blog looms soon. So if you want it early and the added features SUBSCRIBE NOW it’s FREE!

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Hi, my name is Ty Andros and I would like the chance to show you how to capture the opportunities discussed in this commentary. Click here and I will prepare a complimentary, no-obligation, custom-tailored set of portfolio recommendations designed to specifically meet your investment needs . Thank you. Ty can be reached at: tyandros@TraderView.com or at +1.312.338.7800

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Race Realism

‘Man is a mammal and subject to the same biological laws as other animals. All animals, including Man, have inheritable behavioural traits. The concept of complete environmental plasticity of human intelligence is a nonsensical wishful-thinking illusion.’

From titans to Lemmings

“The time for talk has ended, only course of action open to us is WAR!”

"The time for talk has ended, only course of action open to us is WAR!"

The essential American soul is hard, isolate, stoic, and a killer. It has never yet melted. — D.H. Lawrence

Ayers’ Plan to Kill 25 Million Americans
Larry Grathwol, Weathermen, William Ayers, Communism, History
line

“The most effective informer the F.B.I. ever placed among the Weathermen” (NY Times) Larry Grathwol describes how William Ayers and other Weather Underground leaders cheerfully planned to deliver the United States to foreign occupation, and proposed to murder 25 million Americans.

Grathwohl: I brought up the subject of what’s going to happen after we take over the government. You know, we become responsible for administrating, you know, 250 million people. And there was no answer. No one had given any thought to economics. How are you going to clothe and feed these people?

The only thing that I could get was that they expected that the Cubans, the North Vietnamese, the Chinese and the Russians would all want to occupy different portions of the United States. They also believed that their immediate responsibility would be to protect against what they called the counter-revolution. And they felt that this counter-revolution could best be guarded against by creating and establishing re-education in the Southwest where we would take all of the people who needed to be re‑educated into the new way of thinking and teach them how things were going to be. I asked, “Well, what is going to happen to those people that we can’t re‑educate, that are die-hard capitalists?” And the reply was that they’d have to be eliminated and when I pursued this further, they estimated that they’d have to eliminate 25 million people in these re‑education centers. And when I say eliminate, I mean kill 25 million people. I want you to imagine sitting in a room with 25 people, most of whom have graduate degrees from Columbia and other well-known educational centers and hear them figuring out the logistics for the elimination of 25 million people and they were dead serious.

Bring it on! WE WILL FIGHT YOU, WE HAVE BEEN MAKING BOMBS AND BUYING LEGAL AND ILLEGAL WEAPONS FOR YEARS, AND WHEN THE TIME COMES MY FELLOW PATRIOTS AND MYSELF, WE WILL TAKE TO THE STREETS, YOU WILL HAVE TO KILL US TO TAKE THIS NATION, BRING IT!!